Factoring Regulation Establishment Bill Scales Second Reading in Senate
Abuja (Core Reporters) The Nigerian Senate on Thursday passed the Factoring Regulation Bill, 2024 SB. 474 for the second reading.
Leading the debate on the floor of the senate on the general principle of the bill, Senator Asuquo Ekpenyong Jnr highlights a critical solution to Nigeria’s MSME cash flow crisis. By unlocking the power of invoice factoring, this bill can revolutionize access to affordable credit for millions of small businesses, driving economic growth, job creation, and competitiveness.
Senator Asuquo Ekpenyong Jnr’s passionate lead debate on the Factoring Regulation Bill, 2024, highlights a critical solution to Nigeria’s MSME cash flow crisis. By unlocking the power of invoice factoring, this bill can revolutionize access to affordable credit for millions of small businesses, driving economic growth, job creation, and competitiveness
Ekpenyong Jnr said, “Mr. President, Distinguished colleagues, it is with a profound sense of duty and commitment to our Nation’s progress that I rise today to lead the debate on the Factoring Regulation Bill 2004. This crucial piece of legislation, which was read for the first time on the 11th of June 2024, directly addresses one of the most persistent challenges faced by our small businesses: delayed payments. Across the country, MSMEs deliver goods or services, issue invoices, and then wait thirty, sixty, or sometimes ninety days before receiving payment. In the meantime, they struggle to pay workers, purchase raw materials, or accept new orders. This cycle of weak cash flow not only traps small businesses but also slows down our economy’s overall growth.”
He highlighted the benefits of the bill saying, “Mr. President, Distinguished Colleagues, the benefits of this Bill are clear and immediate. For MSMEs: faster access to cash, stronger inventories, timely payrolls, and the confidence to accept bigger orders. For the economy: shorter cash cycles, reduced informality, better payment discipline, and increased investor confidence in a transparent, well-regulated asset class. International experience shows the transformative potential of factoring.
In Mexico he said, the government’s Cadenas Productivas program unlocked billions of dollars in working capital for small suppliers.
Also in India the online platforms (TReDS) made it possible for MSMEs to finance invoices from both private and public sector buyers. While In Chile, electronic invoicing deepened the factoring market, while in Brazil, reforms to receivables registries opened safe access to credit for smaller firms. And even closer to home, South Africa has seen significant growth in supply chain finance to support its smaller suppliers.
Meanwhile, Senator Ekpenyong Jnr’s compelling case for the Factoring Regulation Bill, 2024, resonates with Nigeria’s development priorities. By embracing this structural reform, Nigeria can empower MSMEs, stimulate economic diversification, and build a more resilient, inclusive economy.
